Inherently Unneutral Investment Treaty Arbitration: The Formation of Decisive Arguments in Jurisdictional Determinations

The legitimacy crisis of investment treaty arbitration is much discussed, often challenging the neutrality of that system as a whole. Besides concentrating on the direction in which cases are being decided, or in which the law is being interpreted, the neutrality of investment treaty arbitration as a system can also be discussed from the perspective of its foundations. This article looks at the arbitral use of the two basic ideals of investment treaty arbitration, namely the legalistic and teleological notions, in the formation of decisive arguments, in the particular context of jurisdictional decisions. It examines to what extent the two basic ideals in investment treaty arbitration are used in the formation of decisive arguments justifying pro-investor or pro-State interpretive outcomes in resolving jurisdictional issues. It is argued that the foundations of investment treaty arbitration induce arbitrators to opt for one of the two points of view in their work. Faced with an interpretive issue, they can observe it either in light of the fact that the rules, as they are, must have been consented to by the States parties to the investment treaty, or in light of the purpose of such rules to protect foreign investors. This shows that favouring one side over the other when facing difficult jurisdictional issues is not simply dependant on the arbitrators’ personal attitudes. Their approaches might as well reflect the foundations of investment treaty arbitration, while legalistic and teleological decisive arguments seem to form never-ending excuses for favouring one party over the other